LC017: Should startups spend money to attend or sponsor conferences?

Today’s question:

Today’s question comes from Charlie. Is it worth it to pay to attend or sponsor a conference? As a startup, should you pay for the travel costs associated with going to events?

Jake’s answer:

In some cases, it can be well worth the money to sponsor or travel to an event or conference. However, unlike other marketing efforts, such as putting money into ads, it’s hard to determine the true ROI of your investment.

Know Your Audience + Goal

We recently attended Collision Conference, and when I was determining whether or not I should go, I thought about the type of people who would be at the event. As a B2B startup, the attendees of the conference were potential customers. I could do a demo and sign them up right at the event.

Though on the B2C side, we saw a lot of company booths who were getting a few downloads and some attention, but since those in attendance weren’t their actual target customers, they couldn’t close many, if any, sales at the event itself.

However, sometimes it’s good to attend events like this, even if you are a B2C company, if you are looking to get in front of investors or mentors. It comes back to knowing your purpose and your audience before you determine if the event is worth the money it takes to get there and setup shop.

If you are a company that’s trying to make sales at a conference or event, then make sure you are setup to sell. Spend time engaging with the potential customers. Don’t just stand around and play on your phone, focus on getting customers.

Estimate Your ROI

If my ticket + flight + hotel is going to be $5,000, but my goal is to raise the remaining $250k of a $500k round, then it’s probably worth it to spend the money to get in front of investors who will help me reach that goal. This is especially true if you do your research ahead of time and make sure

Now let’s say your goal is to go get customers and you are selling a $100 product. Assume you do five demos an hour and you know that one in fifteen demos will be a customer. If you do the math and it shows that you can recoup your costs of the show, then absolutely spend the money to make it work. But if not, maybe it’s better to spend the time and money on other marketing channels.

No matter what you do, focus your time and money on things that will give you traction. Is spending the money on the conference going to get your closer to your goal? Even if the event is free, you still have to account for the opportunity cost of your time. So always think of it from an ROI standpoint – not what you think you should be doing as a startup.

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